Higher state tax on beer?

ASSEMBLYMAN BEALL PROPOSES BIG INCREASE

SACRAMENTO - Joe Six-pack will have to pay a lot more to get his buzz on if Assemblyman Jim Beall has his way.

The San Jose Democrat on Thursday proposed raising the beer tax by $1.80 per six-pack, or 30 cents per can or bottle. The current tax is 2 cents per can. That's an increase of about 1,500 percent.

Beall said the tax would generate $2 billion a year to fund health care services, crime prevention and programs to prevent underage drinking and addiction.

"The people who use alcohol should pay for part of the cost to society, just like we've accepted that concept with tobacco," Beall said.

He added that the beer tax hasn't been touched since 1991, and the increase then was meager.

But the freshman lawmaker will have to lift the legislative equivalent of a full keg of beer over his head to get his tax enacted. That's because it would require a two-thirds vote in the Assembly and Senate - and then, because it's a constitutional amendment, it would have to be approved by voters. Republicans say it's a non-starter.

"I predict the shelf life will be very short," said Assemblyman Roger Niello, R-Sacramento, vice chairman of the budget committee. "It's a piecemeal approach to the budget that completely avoids any discussion of spending discipline, which is fundamentally why we have the problem that we have."

Mike Fox Sr., chairman of San Jose-based beer distributor M.E. Fox & Co., said Beall's heart is in the right place.

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"He's very dedicated in areas of health," Fox said. "But a tax of that nature is far too grievous. The beer industry produces so much for the economy. He won't get to first base with that."

Dan Gordon, co-founder of Gordon Biersch Brewing Co., calculated that the tax on a barrel of beer would go from $6.40 to $89. "We would all be looking for jobs," he said.

Beall said he's targeting beer because his research showed that California undertaxes brew relative to other states, which he said isn't the case with wine and spirits. But it's also true that taking on the beer lobby will be hard enough for Beall, without letting it team up with the wine and spirits industries.

Beall, a former Santa Clara County supervisor, has focused heavily on underage drinking during his time in Sacramento. He is pushing legislation that would require the sweet alcoholic malt beverages known as "alco-pops" to include warning labels clearly stating that they contain alcohol.

And last year, Beall lobbied successfully to persuade the state Franchise Tax Board to tax "alco-pops" at the rate assessed to hard liquor products instead of beer - a move that was expected to raise the price of a six pack by about $2. The increase is scheduled to go into effect later this year.

That effort, however, did not require a two-thirds vote in the Legislature.